A Fresh Look at Akero Therapeutics (AKRO) Valuation After Recent Share Price Surge

Akero Therapeutics (AKRO) has been attracting attention recently as its stock price has gained 25% in the past month. Investors are weighing this positive momentum against the company’s unique position in biotech, especially given its limited reported revenue.

See our latest analysis for Akero Therapeutics.

After an impressive 24.58% share price gain over the past month, Akero’s momentum is turning heads, and it’s not just a short-term story. The stock has surged 91.88% year-to-date, highlighting growing optimism about its future prospects despite minimal reported revenue. Over the past year, total shareholder return reached 81.84%, signaling that investors are starting to factor in significant long-term potential.

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With shares trading markedly higher this year, investors are left wondering whether Akero is potentially undervalued or if the market has already priced in all the anticipated future growth for this biotech innovator.

Price-to-Book of 4.2x: Is it justified?

Akero Therapeutics is trading at a price-to-book (P/B) ratio of 4.2x, noticeably below the peer group average of 9.7x but above the US Biotech industry average of 2.6x. With the last close at $53.88, the market seems to be placing a premium on Akero’s assets compared to most sector peers, yet still values the company below the broader peer group.

The price-to-book ratio captures how much investors are paying for each dollar of net assets the company has. In biotech, where profits can be elusive and assets are often tied up in R&D or cash, this measure offers a reality check on market sentiment versus actual book value.

Akero’s multiple suggests the market is willing to pay a premium, likely for future potential rather than current profitability or assets. However, investors should note that while this is an attractive discount to some peers, it carries a significant mark-up over the broader industry.

Compared to the US Biotech average, Akero's price-to-book is over 60% higher, hinting at strong optimism about its growth pipeline or intellectual property. Relative to its direct peer group, the stock looks modestly valued, which could suggest room for market re-rating if milestones are hit.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Book of 4.2x (ABOUT RIGHT)

However, significant risks remain, including Akero’s lack of current revenue and its reliance on successful clinical milestones to justify optimism.

Find out about the key risks to this Akero Therapeutics narrative.

Build Your Own Akero Therapeutics Narrative

If you believe there’s more to Akero’s story than what we’ve covered, you can dig into the data and build your own perspective in just a few minutes: Do it your way

A great starting point for your Akero Therapeutics research is our analysis highlighting 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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